This is a question I have asked myself frequently whilst working with the numerous and varied clients I have coached and mentored over the last 5 years in the field of property investment. The answer is multi-faceted and thought-provoking.
Most of you will read this and common sense will very likely lead you to the same conclusions, although how many of us actually take stock every now and again to see where and how we may improve our abilities and increase our success rate? It takes a number of skills and traits to really ‘get it’, some of which are innate and some we have to learn over time and through experience.
The Right Formula
The reason for asking this question and wanting to get to the bottom of it was to find the ‘right formula’ to pass on to others’, thus enabling them to be successful and progress positively through investing. The answers below are designed to inspire you to think about and take action where required in developing those areas of your property business which will make it run more smoothly and effectively. Firstly and most importantly this is a people business. Being able to build rapport, be positive, interact and work with people is one of the biggest determining factors in your success as a property investor. Of course it is good to know that what you’re investing in is a good investment although who you deal with and how you deal with them determines your real level of success.
Its all in the head!
Mindset, belief and self-confidence are next. Investing, as with anything in life, all starts in the head. If you are certain of what you are doing and know the steps to take in order to achieve the results you want, great! Most people aren’t born this way and need to develop their confidence as well as be informed of the twists and turns of the market and having strategies to cope with these. Becoming a successful investor is predominantly a ‘learned’ process which begins with what you’re thinking about. This leads me on to the next point which is education and information.
These factors are crucial in terms of the ‘how to’ factor of building your business. Getting to know the property business with its different strategies, regulations, systems and networks are the keys to ‘getting it right’. On this point, it is essential that you take on board this information from those you feel you can trust. Doing your due diligence on the people you aim to seek advice from is crucial when it comes to this point. Being able to run analysis, due diligence and research on whatever and whoever you are investing in is incredibly important. Without doing this part properly, you could be investing a lot of time, money and effort into a project which could end up costing you rather than making you money. Only when the deal ‘stacks up’ on paper and everything ‘feels right’ should you go for it.
Calculate the TRR
Another critical factor which I have just touched upon are the intuition and ‘gut feeling’ aspects of investing. Even if something or someone sounds amazing and the numbers work, if you are in any doubt whatsoever, you should listen! It is the part of you that instinctively knows whether something is right or wrong and this should always be heeded. I’m sure you know what I’m talking about here as we’ve all done things against our better judgement, only to suffer for it later! Knowing how to ‘run the numbers’ and assessing what makes a good investment is what will help you determine whether you have a good deal in the first place or not. Only put your offer in if the deal really works for you and you are not compromising yourself. Remember to calculate the TRR (True Rate of Return) which is the actual profit you make on any money left in the deal, rather than yield or ROI alone.
Making decisions
Without being organised and having systems in place to run your business, things can quickly turn to chaos in a property business. Properties breed paperwork and you must keep on top of general admin, filing and accounting, etc, before it gets on top of you. Organise yourself in a way that makes your business efficient – a great tip is to never touch the same piece of paper twice; deal with it there and then. The capacity to make decisions is an ability that requires you to trust your own judgement. You will do well in this business if you can align your head, heart and gut when it comes to making decisions based on what is presented to you.
Being practical and proactive will always be appreciated as well as keeping your word. Doesn’t it make a difference when you come across people who are down to earth and just do what they say they’re going to do! The capability to be responsible and compassionate in situations links in with the human aspect of the business. If you’re able to show a measure of understanding and empathy in situations which may present a challenge, it will be remembered. Taking responsibility if things go wrong your end will also be appreciated rather than trying to cover up any mistakes. The ‘why’ factor! This is the intangible element which, in my opinion, is vital to the success of anyone wishing to succeed in property. It is unquantifiable in nature and yet gives you your reason to ‘get out of bed in the morning’ and keep going no matter what. It takes a lot to be a great investor and some people are better at it than others.
No-one is perfect and the idea is that if we can all help each other to develop our businesses in some small way then the outcome is improved for all concerned. If you feel inspired, look through this list and see if you can make 3 small changes in your business that will improve the way it runs. Oh, I almost forgot! Another trait of a great investor is the ability to delegate – so it could be that doing this speeds things up for you – just make sure you can trust that they will do the job properly…!
Thanks to Hazel de Kloe for providing this fantastic article.
Hazel is one of our new experts and is available to answer any questions.
If you wish to contact Hazel please email me at julie@justdoproperty.co.uk
- Selling a House in a Trust After Death: What You Should Know - April 18, 2024
- Maximising Your Home’s Potential: The Ultimate Renovation Checklist - April 16, 2024
- Key Tips on Managing Your Property Portfolio - April 16, 2024
